First UK director disqualified for a competition law breach

Gordon Downie, Head of Energy and Natural Resources at Shepherd and Wedderburn discusses the implications of  a landmark ruling announced today, concerning the first UK director to be disqualified as a result of competition law breach.

2 December 2016

In a landmark ruling announced today, Daniel Aston earned the dubious honour of becoming the first UK director ever to be disqualified as a result of competition law breach.

His disqualification - which will run for a period of five years -  follows the decision by the UK's Competition and Markets Authority (CMA) in August this year that online postal supplier, Trod Limited, had breached competition law by agreeing with one of its competing online sellers that they would not undercut each other’s prices for posters and frames sold on Amazon’s UK website.  The CMA decided to fine Trod Limited (of which Mr Aston was managing director at the relevant time) £163,371.

Under the Company Directors Disqualification Act, the CMA has the power to apply to the court for an order disqualifying a director from holding company directorships or performing certain roles in relation to a company for a specified period if a company of which he or she is a director has breached competition law. The Act also allows the CMA to accept a disqualification undertaking (such as the one given by Mr Aston in this case) from a director instead of bringing proceedings. A disqualification undertaking has the same legal effect as a disqualification order.

Interestingly, the other company involved in the competition law breach, GB eye Ltd (trading as ‘GB Posters’), had "blown the whistle" on the cartel activity and, under the CMA’s leniency policy, its directors were exempted from disqualification orders.